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TMI Blog2022 (8) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case is recurring in nature and has been decided in favour of the assessee by the decision of the coordinate bench of the Tribunal for preceding assessment years. Thus, we uphold the plea of the assessee and delete the impugned addition. - Decided in favour of assessee. - ITA No. 1205/Mum./2021 - - - Dated:- 1-8-2022 - SHRI PRAMOD KUMAR , VICE PRESIDENT AND SHRI SANDEEP SINGH KARHAIL , JUDICIAL MEMBER Assessee by : Shri Madhur Agarwal , Advocate Revenue by : Shri K. C. Selvamini , Addl. CIT ORDER PER SANDEEP SINGH KARHAIL , J. M. The present appeal has been filed by the assessee challenging the final assessment order dated 19/04/2021, passed by the Assessing Officer under section 143(3) read with section 144C(13) of the Income Tax Act ( the Act ), for the assessment year 2017 18. 2. In this appeal, assessee has raised following grounds: Each of the grounds and/ or sub-grounds of the appeal are independent and without prejudice to one another. 1. On the facts and circumstances of the case and in law, the Hon'ble Dispute Resolution Panel (Hon'ble DRP)/Learned Assessing Officer (Ld. AO) erred in further attributing Rs.8,35,44,660, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 6.1 not appreciating that no further attribution of income is warranted, once the international transaction has been accepted to be at arm's length in the assessment proceeding of the Indian agent i.e. Hempel Paints (India) Pvt. Ltd. (Hempel India') who is recipient of such commission income; 6.2 not considering the fact that for the same nature of transaction there could not be multiple arm's length price i.e. while performing the agency function the Ld. AO/Hon'ble DRP has determined 25% of the sales made in India on ad-hoc basis as income attributable to the PE, however while remunerating Hempel India for performing same function/agency services, the Ld. AO has concluded 8.17% commission on sales as expense deductible while computing the profits of PE. Thus, for the same nature of transaction the Ld. AO/ Hon'ble DRP has determined two different remuneration i.e. 25% of the sale for income side on ad hoc basis and 8.17% on sale for expense side; 6.3 not appreciating that there no 'significant people function were performed by the PE of the Appellant in India and thus, no further attribution was warranted. 7. On the facts and circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reversed the orders of past assessment proceedings and have decided the matter in favour of the assessee for assessment years 2014 15 and 2015 16. The Assessing Officer vide draft assessment order dated 19/12/2019 passed under section 144C of the Act observed that the Revenue has preferred appeal before the Hon ble jurisdictional High Court against the aforesaid order passed by the coordinate bench of Tribunal. Further, the Assessing Officer, following the approach adopted in preceding assessment years, attributed additional profit at 25% of sale value to the assessee s PE. 5. The assessee filed detailed objections against the addition made by the Assessing Officer. Vide directions dated 15/03/2021, issued under section 144C (5) of the Act, learned Dispute Resolution Panel ( DRP ), though noted that identical issue in assessee s own case has been decided in its favour by the coordinate bench of the Tribunal, rejected the objections filed by the assessee in order to keep the issue alive and to protect the interest of the Revenue. 6. In conformity with the directions issued by the learned DRP, the Assessing Officer vide impugned final assessment order dated 19/04/2021, attribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no further need to attribute profits to the agency PE so long as the remuneration to the Indian agent has been held to be at an arm's length price. Undoubtedly, the proposition sought to be canvassed by the assessee has the approval of Hon'ble Supreme Court in the case of M/s. Morgan Stanley Co. Inc (supra). The judgment of the Hon'ble Bombay High Court in the case of SET Satellite Singapore Pte Ltd. (supra) is also on the same lines in terms of which it is safe to draw the premise that if appropriate arm's length price has been found to have been applied and paid, nothing more would be left to be taxable in India by attributing further income to the PE of the foreign enterprise. The aforesaid proposition, in our view, is fully attracted in the present case having regard to the fact that for the instant assessment year the commission has been found to be at arm's length price in the hands of the recipient Indian subsidiary, i.e. Hempel India in view of the assessment order dated 27.10.2017 (supra). 8. Before parting, we may also refer to the judgment of the Hon'ble Delhi High Court in the case of DIT vs BBC Worldwise Ltd., ITA Nos. 1341 of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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